Notes to Accounts of Zenotech Laboratories Ltd.

Mar 31, 2025

h. Provisions, contingent Liabilities & contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.

Contingent assets are disclosed in the Financial Statements by way of notes to accounts only in case of
inflow of economic benefits is probable.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts for possible
obligations which will be confirmed only by future events not wholly within the controls of the Company or
present obligations arising from past events where it is not probable that an outflow of resources will be
required to settle the obligation or reliable estimate of the amounts of the obligation cannot be made.

i. Retirement and other employee benefits

i) Gratuity: Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial
valuation made at the end of each financial year under the projected unit credit method. Actuarial
gains/losses comprise experience adjustments and the effect of changes in actuarial assumptions and
are recognized immediately in the other comprehensive Income as Income on the basis of valuation
by an independent Actuary. The liability is unfunded.

ii) Provident Fund: A retirement benefit in the form of provident fund scheme is a defined contribution
and the contribution is charged to the statement of profit and loss of the year when the contribution to
the respective fund is due. There are no other obligations other than the contribution payable to the
respective fund.

iii) Compensated Absences: Liability in respect of compensated absence is determined and charged to
the statement of profit and loss on the basis of valuation by an independent actuary.

j. Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the company commits to purchase or sell the asset.

For purposes of subsequent measurements, ''debt instrument'' is measured at the amortised cost if both the
following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised
cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss.
The losses arising from impairment are recognised in the profit or loss. This category generally applies
to trade and other receivables.

Equity investments

All equity investments in subsidiaries are measured at cost less diminution other than temporary. All
equity investments in scope of Ind AS 109 are measured at fair value.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on
the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts
from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain
or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of similar financial assets) is
primarily derecognised i.e. removed from the Company''s balance sheet when:

> the Company has transferred its rights to receive cash flows from the asset ; and either

> the Company has transferred substantially all the risks and rewards of the asset, or

> the Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the assets carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss will be
recognised as profit or loss on disposal.

Impairment of financial assets

In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:

> Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance

> Trade receivables or any contractual right to receive cash or another financial asset that result
from transactions that are within the scope of Ind AS 115

The company follows ''simplified approach'' for recognition of impairment loss allowance on:

> Trade receivables or contract revenue receivables; and

> The application of simplified approach does not require the Company to track changes in credit
risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting
date, right from its initial recognition.

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss on the following financial assets that are debt
instruments, and are measured at amortised cost.

For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12 months ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12-months ECL is a portion of the lifetime ECL which
results from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required
to consider:

> All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the
expected life of the financial instrument cannot be estimated reliably, then the entity is required to
use the remaining contractual term of the financial instrument.

> Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance
on portfolio of its trade receivables. The provision matrix is based on its historically observed default
rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At
every reporting date, the historical observed default rates are updated and changes in the forward¬
looking estimates are analysed. On that basis, the Company estimates the following provision matrix
based on the assumptions which are derived based on the expected outcomes.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the statement of profit and loss (P&L). This amount is reflected under the head ''other
expenses'' in the P&L. The balance sheet presentation for various financial instruments is described
below:

> ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in
the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write¬
off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

> For assessing increase in credit risk and impairment loss, the Company combines financial
instruments on the basis of shared credit risk characteristics with the objective of facilitating an
analysis that is designed to enable significant increases in credit risk to be identified on a timely
basis.

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, loans and borrowings, payables as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction cost

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

> Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or
loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes
in own credit risks are recognized in OCI. These gains/ loss are not subsequently transferred
to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other
changes in fair value of such liability are recognised in the statement of profit and loss. The
Company has not designated any financial liability as at fair value through profit or loss.

> Financial liabilities at amortised cost

After initial recognition financial liabilities if any are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance
costs in the statement of profit and loss.

> Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit and loss.

> Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount is presented in Balance Sheet when,
and only when, the Company has a legal right to offset the recognized amounts and intends
either to settle on a net basis or to realize the assets and settle the liability simultaneously.

k. Cash and cash equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of
the Company''s cash management.

Cash flows are reported using the indirect method, whereby profit/(loss) before tax is adjusted for the
effects of transactions of no cash nature and any deferrals or accruals of past or future cash receipts or
payments. Cash flow for the year is classified by operating, investing and financing activities.

2.3 Recent Accounting Pronouncements:

i) New and amended standards adopted by the Company:

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. MCA has notified Ind AS -
117 Insurance Contracts & consequential amendments to the other standards and amendments to Ind AS
116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1, 2024.

The Company has reviewed this new pronouncement and based on its evaluation has determined that it
does not have any significant impact in its financial statements.

ii) New Standards/Amendments notified but not yet effective:

MCA has not notified any new standards or amendments to the existing standards applicable to the
Company.

Provision for indirect taxation:

Provision for indirect taxation comprises of dues towards Custom duty (EPCG). Directorate General of Foreign
Trade (DGFT) had issued 18 EPCG licenses during the period 2003 to 2009 for which fulfilment of Export
Obligation was pending. On 06.05.2016, Directorate of Revenue Intelligence (DRI) issued a show cause notice
to the Company for non-fulfilment of export obligation for the said licenses. The case was adjudicated by the
Principal Commissioner of Customs vide OR.No. 48/2016-Adjn.Cus.(Commr.) dated 27.03.2017 directing the
Company to pay the duty foregone along with applicable interest and redemption fines on 14 licenses. The
Company filed export redemption requests for 3 EPCG licenses to RA-Hyderabad on 28.03.2018 and remitted
Customs duties amounting to Rs. 2.97 Crores in compliance to the order. Meanwhile, the Company filed an
appeal before CESTAT on 06.07.2017 challenging the order on interest, penalties and fines, which is pending for
hearing as on date. On 01.04.2023, DGFT notified Amnesty Scheme for one time settlement of default in export
obligation by advance and EPCG authorisations vide Public Notice No. 02/2023 dated 01.04.2023 applicable
for all such authorisations whose export obligation period (original or extended) was valid beyond 12.08.2013.
Though the Company registered to avail the scheme for all pending licenses, only 4 out of 15 licenses were
approved by DGFT for consideration under the Scheme. The Company further appealed to the Policy Relaxation
Committee (PRC) of DGFT on 20.12.2023 for consideration of 10 licenses under the scheme, which was granted
by PRC on its meeting 33/AM24 held on 22.03.2024. The Company remitted balance duties and interest of
Rs. 1.96 Cr as per Amnesty Scheme during the quarter ended 31st March, 2024 and request filed for Export
Obligation Discharge Certificate (EODC) with DGFT online, DGFT had issued EODC for 12 EPCG licenses till
31st March, 2025 and the process is in progress for balance 2 licenses.

C) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument may result from changes
in the foreign currencies, exchange ratios, interest ratio, credit, liquidity and other market changes. However,
currency risk and the interest risk are not significant to the Company since, the Company has only Indian rupee
borrowings which is medium term in nature.

Note 26 (a) Operating Lease

Operating leases, in which the Company is the lessor, relate to equipment owned by the Company with lease
terms up to 7 years. The agreement can be terminated any time by Lessor/ Lessee by giving 60 days prior
written notice. All operating lease contracts contain market review clauses in the event that the lessee exercises
its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

Maturity analysis of operating lease payments:

Notes to the Standalone Financial Statements for the Year ended March 31, 2025 (Contd)

(All amounts in thousands of Indian Rupees except share data and where otherwise stated)

Note 27: Operating Segment Disclosure

As per Ind AS 108 segment information to be presented from management''s perspective, which means it is presented
in the way used in internal reporting. The basis for identifying reportable segments is internal reporting as it is reported
to and followed up on by the chief operating decision maker (CODM). The Company has, in this context, identified
the Chief Executive Officer of the company as the chief operating decision maker. The chief executive officer of
the Company is responsible for allocating resources and assessing performance of the operating segments and
accordingly is identified as the chief operating decision maker. The Chief Executive Officer evaluates the operating
segments'' results on the basis of revenue and gross profit as the performance indicator for all of the operating
segments, and does not review the total assets and liabilities of an operating segment as it is not provided regularly
to CODM for review.

Zenotech Laboratories Limited is engaged in single business activity of Pharmaceuticals and the company does not
have multiple operating segments. Other than revenue analysis that is disclosed in Note (21), no operating results
and other discrete financial information is available for the assessment of performance of the respective business
divisions and resources allocation purpose.

Major Customer Dependency

Entire portion of the operating revenue earned by the Company is from single customer i.e., Sun Pharma Group. In
the current year, revenue earned from Sun Pharmaceutical Industries Limited is 100% (PY:100%) of the total revenue
for the year.

Note 28: Interests in other entities

a) Subsidiaries

The Company''s subsidiaries as at 31 March 2025 are set out below. Unless otherwise stated, they have share
capital consisting solely of equity shares that are held directly by the Company, and the proportion of ownership
interests held equals the voting rights held by the company. The country of incorporation or registration is also
their principal place of business

Notes:

The managerial personnel are covered by the Company''s gratuity policy and Mediclaim insurance policy taken
and are eligible for leave encashment along with other employees of the Company. The proportionate premium
paid towards these policies and provision made for leave encashment/ gratuity pertaining to the managerial
personnel has not been included in the aforementioned disclosures as these are not determined on an individual
basis.

Note 30:

a) Update on the events and circumstances relating to on-going differences with Late Dr. Jayaram
Chigurupati, the erstwhile Promoter and Managing Director of the Company.

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited
(taken over by Sun Pharmaceutical Industries Limited effective from 24 March 2015 pursuant to a merger scheme
herein after referred to as the “current promoters”) there were disagreements on various accounts between
Late Dr. Jayaram Chigurupati and Ranbaxy Laboratories Limited/Daiichi Sankyo Company Limited resulting in
various legal cases being filed by both the parties before various forums. The Management was denied access
to the factory and other premises of the Company due to which a legal case was filed before the Company Law
Board (CLB), Chennai, for taking over the physical possession of the factory premises from Late Dr. Jayaram
Chigurupati, the erstwhile Promoter and Managing Director of the Company. Owing to the protracted legal case,
the physical possession of the factory premises could be taken over on November 13, 2011 in the presence
of CLB appointed Advocate Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the
gaining of the possession of the factory premises, further assessment by the Management revealed that, among
others, certain books and records, supplementary documents and statutory registers till the period 12 November
2011 were missing and which are still not in the possession of the Company. The Honourable Company Law
Board vide order dated 8 October 2012 further directed the erstwhile Promoter and Managing Director of the
Company to return all the documents and provide written details of all missing documents/ assets/ statutory
records / equipment of the Company. The Honourable High Court of Andhra Pradesh has also passed a similar
order. The Company has not yet received any of these documents/ information.The Management, therefore,
based on the available limited records, statutory returns filed, supplementary documents, invoices, external
corroborative evidence and after considering the various non compliances under the Companies Act, 1956,
listing agreement and Foreign Exchange Management Act, etc. post 12 November 2011, reconstructed financial
statements for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and
compounding such non compliances with the various authorities concerned.Since matters relating to several
financial and non-financial irregularities are sub-judice and various legal proceedings are on-going, any further
adjustments / disclosures to the financial statements, if required, would be made in the financial statements of
the Company as and when the outcome of the above uncertainties is known and the consequential adjustments
/ disclosures are identifiable/ determinable.

Accordingly, based on the steps taken by the Company and evidence available so far, any financial impact on
the results of the Company is likely to be significantly low.

b) Investment in subsidiaries:

Upon obtaining control of the Company, the Management observed that no books of account and records
were available regarding its overseas subsidiaries. The management has not received any response from
the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and
seeking documents / certificates related to Forex transactions with these subsidiaries including certain loans
and investment made in the same. Provision has not been made for potential and financial consequences
arising out of such on-going evaluations, the outcome of which will depend on the nature and extent of non
compliances which is currently not determinable. Meanwhile, the Company received the winding up order for
its defunct subsidiary in Nigeria in FY: 2019-20 and the Company is in the process of filing related reports with
RBI. The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil)
and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the
Registration Cancellation certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June,
2022 respectively, received from concerned authorities.

*During the FY 2012-13, the Company received legal notices from the Assistant Commissioner of Labour,
Vikarabad circle, Hyderabad pursuant to applications filed by 19 ex-employees of the Company for non-payment
of gratuity amounting to approximately ? i860. The Company had responded to the said notice and the matter
is still pending for hearing.

**During the year 2015-16, the Joint Director General of Foreign Trade (JDGFT) issued orders on 5 EPCG
licenses imposing penalties amounting to ? 96,000 for non-fulfilment of export obligations. The Company filed
appeal before DGFT, New Delhi and DGFT passed an interim stay order on 04.03.2016 directing RA-Hyderabad
not to take any punitive action against the Company. However, final disposal of the matter is pending with DGFT
Balance ? 8640 pertain to redemption fines and penalties imposed by the Principal Commissioner of Customs
in the adjudication order OR.No.48/2016-Adjn.Cus.(Comr) dated 27.03.2017. The Company''s appeal before
CESTAT challenging the order is pending for hearing as on the date of balance sheet. (Refer Note No. 14(b) -
“Provision for Indirect Taxation”).

Legal cases filed by/against the Company

a) . During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition under

Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement.
The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay
individually or jointly the outstanding dues to TDB. During the earlier years, 600,000 equity shares of the
Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security.
During the year ended March 31, 2018, Company has repaid all the amount due to TDB ( excluding Interest)
based on the settlement agreement by the DRC (Dispute Resolution Committee). The Interest liability will
depend upon the liability payable less the shares sold in the open market by TDB (Pledged shares)

b) . The Company has filed certain legal cases before the appropriate forum against the erstwhile promoter and

managing director with regard to loss of vehicles, missing records including intellectual property, unauthorised
use of the name & Logo of the Company and certain missing DNA clones.

c) . Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories Limited

(now Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to acquire 20%
share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, erstwhile promoter and one
or two other shareholders filed a petition in the Hon''ble High Court of Madras. The Company has been named
as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon''ble High
Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition filed by
DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including erstwhile
promoter of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the
share of the Company against the order of the SEBI turning down erstwhile promoters'' complaint. SAT directed
DS to price the open offer at Rs 160 per share. DS has filed an appeal against the SAT order in the Supreme
Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favour of DS and allowed the open offer
to be made at the price of Rs 113.62 per share.

In June 2012, erstwhile promoter has filed a writ petition before Honourable Andhra Pradesh High Court against
Foreign Investment Promotion Board and DS challenging acquisition of 20% shares of the Company by DS
through an open offer.

d) . In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course

of business including litigation before various tax authorities. The Company''s Management does not reasonably
expect that these legal actions, when ultimately concluded and determined, will have a material and adverse
effect on the Company''s results of operations or financial conditions. The Company has accrued appropriate
provision wherever required.

e) . Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

f) . During the A.Y 2020-21 service tax dispute was settled under sabka vishwas scheme which was claimed as an

expense u/s.43B. However the settled amount has been disallowed u/s 143(1)(a) and demand intimation was
issued for Rs 2,04,79,333. The company has filed an appeal with commissioner challenging the disallowance
made

Under Section 143(3), a disallowance of ^1,71,19,665 was made, resulting in tax sought to be avoided of
?52,89,976. The company lost its appeal in CIT(A), and a penalty of 100% under Section 271(1)(c) was imposed
by the National Faceless Assessment Centre. The company has filed an appeal against the penalty order, which
is currently pending before CIT(A).

(ii) Contingent assets: Nil

Note 32:Assets pledged as security

The carrying amount of assets pledged as security in case of loan taken from Technology Development Board (TDB)

Note 36: Other Statutory Information

a) . No proceeding have been initiated or pending against the Company under the Benami Transactions (Prohibitions)

Act, 1988 (45 of 1988) and the Rules made thereunder.

b) . The Company has not traded or invested in crypto currency or virtual currency during the financial year.

c) . The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMPs,

either severally or jointly with any other person.

d) . The Company does not have any transaction which is not recorded in the books of accounts that has been sur¬

rendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

e) . The Company has not been sanctioned working capital limits from banks or financial institutions during any point

of time of the year on the basis of security of current assets.

f) . The Company has not been declared wilful defaulter by any bank or financial institution or government or any

other government authorities.

g) . The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including

foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or

ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

h) . The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding

Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or

ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

i) . The Company does not have any transactions with struck off companies.

j) . The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the

statutory period.

k) . The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read

with the Companies. (Restriction on number of Layers) Rules, 2017

l) . No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of

the Companies Act, 2013.

m) . The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible

assets or both during the current or previous year.

n) . The Company has not declared or paid dividend during the year 2024-25.

o) . The Company does not hold any investment property and hence the disclosure on fair valuation of investment

property is not applicable to the Company.

Note 37:

The Company has used accounting software during the year which has the audit trail feature of recording audit trail (edit
log) facility being enabled throughout the year. Post publication of ICAI implementation guide in February 2024, direct
database level changes were also included in audit trial scope, but the company uses such a software that it has no
database but only objects and collections, hence, no changes is possible at that level.

Note 38:

Previous year''s figures have been regrouped, wherever necessary, to conform to current year''s grouping.

Note 39:

The financial statements were approved by the board of directors on April 25, 2025.

As per our Report of even date attached

for PKF Sridhar & Santhanam LLP for and on behalf of the Board of Directors of

Chartered Accountants Zenotech Laboratories Limited

Firm Registration Number: 003990S/S200018 CIN: L27100TG1989PLC010122

Viswanath VNSS Kuchi Azadar Husain Khan Jagruti Prashant Sheth Dr.Sachin Laxmanappa Gavandare

Partner Chairman Director Chief Executive Officer

Membership No.: 210789 DIN:01219312 DIN:07129549

UDIN: 25210789BMOUUR1057 Poly K.V.

Chief Financial Officer

Abdul Gafoor Mohammad

Company Secretary

Place: Hyderabad Place: Delhi Place: Mumbai Place: Hyderabad

Date: April 25, 2025 Date: April 25, 2025 Date: April 25, 2025 Date: April 25, 2025

---

Mar 31, 2024

The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the Registration Cancellation certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from concerned authorities. The Company received winding up order for Zenotech Laboratories Nigeria Limited during FY: 2019-20.However, related filings with RBI is pending.

(b) Terms/rights attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. On winding up of the Company, the holders of equity shares will be entitled to receive residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held by the shareholders.

Nature and purpose of each reserve

Securities premium - The amount received in excess of face value of the equity shares is recognised in securities premium. It is utilised in accordance with the provisions of the Companies Act, 2013

Retained Earnings -This reserve represents undistributed accumulated earnings of the company as on balance sheet date.

The Company had repaid the principal loan amount of Rs.29,648 to Technology Development Board (TDB) during the year 2017-18. However, Rs. 27,645 towards Interest due is payable to TDB subject to realisation of 6,00,000 shares of Late.Dr. Jayaram Chigurupati held by TDB as security against the secured loan, as per the settlement agreement dated 22nd February, 2018 signed between the Company and TDB

Provision for indirect taxation

Provision for indirect taxation comprises of dues towards Custom duty (EPCG). Directorate General of Foreign Trade (DGFT) had issued 18 EPCG licenses during the period 2003 to 2009 for which fulfilment of Export Obligation was pending. On 06.05.2016, Directorate of Revenue Intelligence (DRI) issued a show cause notice to the Company for non-fulfilment of export obligation for the said licenses. The case was adjudicated by the Principal Commissioner of Customs vide OR.No. 48/2016-Adjn.Cus.(Commr.) dated 27.03.2017 directing the Company to pay the duty foregone along with applicable interest and redemption fines on 14 licenses. The Company filed export redemption requests for 3 EPCG licenses to RA-Hyderabad on 28.03.2018 and remitted Customs duties amounting to Rs. 2.97 Crores in compliance to the order. Meanwhile, the Company filed an appeal before CESTAT on 06.07.2017 challenging the order on interest, penalties and fines, which is pending for hearing as on date. On 01.04.2023, DGFT notified Amnesty Scheme for one time settlement of default in export obligation by advance and EPCG authorisations vide Public Notice No. 02/2023 dated 01.04.2023 applicable for all such authorisations whose export obligation period (original or extended) was valid beyond 12.08.2013. Though the Company registered to avail the scheme for all pending licenses, only 4 out of 15 licenses were approved by DGFT for consideration under the Scheme. The Company further appealed to the Policy Relaxation Committee (PRC) of DGFT on 20.12.2023 for consideration of 10 licenses under the scheme, which was granted by PRC on its meeting 33/AM24 held on 22.03.2024. The Company remitted balance duties and interest of Rs. 1.96 Cr as per Amnesty Scheme during the quarter ended 31st March, 2024 and request filed for Export Obligation Discharge Certificate (EODC) with DGFT online, which are in process.

b) Leave Obligation

The actuarial valuation has been carried out using the Projected Unit Credit Method. Under this method, the Defined Benefit Obligation is calculated taking into account pattern of availment of leave whilst in service and qualifying salary on the date of availment of leave. In respect of encashment of leave, the Defined Benefit Obligation is calculated taking into account all types of decrement and qualifying salary projected up to the assumed date of encashment.

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The management assessed that cash and cash equivalents, bank balances, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Note 24(b):Fair Value Hierarchy

As no financial instrument has been re-measured at fair value on recurring basis as at each financial period end, fair value hierarchy disclosure is not applicable

Note 25: Financial Risk Management

A) Credit Risk

As the Company currently deals only with the parent entity, it is not exposed to any credit risk as on the reporting date

B) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

Management monitors rolling forecasts of the companies'' liquidity position comprising the cash and cash equivalents on the basis of expected cash flows.

i) Financial Arrangements NIL

ii) Maturities of financial liabilities

The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

There are no derivatives financial liabilities for the company.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

C) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument may result from changes in the foreign currencies, exchange ratios, interest ratio, credit, liquidity and other market changes. However, currency risk and the interest risk are not significant to the Company since, the Company has only Indian rupee borrowings which is medium term in nature.

Note 26 (a) Operating Lease

Operating leases, in which the Company is the lessor, relate to equipment owned by the Company with lease terms up to 7 years. The agreement can be terminated any time by Lessor/ Lessee by giving 60 days prior written notice. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

The company''s objectives when managing capital are to:

> Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

> Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

As the company does not have any debt as on balance sheet date, the gearing ratio is not applicable

Note 27: Operating Segment Disclosure

As per Ind AS 108 segment information to be presented from management''s perspective, which means it is presented in the way used in internal reporting. The basis for identifying reportable segments is internal reporting as it is reported to and followed up on by the chief operating decision maker (CODM). The Company has, in this context, identified the Chief Executive Officer of the company as the chief operating decision maker. The chief executive officer of the Company is responsible for allocating resources and assessing performance of the operating segments and accordingly is identified as the chief operating decision maker. The Chief Executive Officer evaluates the operating segments'' results on the basis of revenue and gross profit as the performance indicator for all of the operating segments, and does not review the total assets and liabilities of an operating segment as it is not provided regularly to CODM for review.

Zenotech Laboratories Limited is engaged in single business activity of Pharmaceuticals and the company does not have multiple operating segments. Other than revenue analysis that is disclosed in Note (21), no operating results and other discrete financial information is available for the assessment of performance of the respective business divisions and resources allocation purpose.

Major Customer Dependency

Entire portion of the operating revenue earned by the Company is from single customer i.e., Sun Pharma Group. In the current year, revenue earned from Sun Pharmaceutical Industries Limited is 100% (PY:100%) of the total revenue for the year.

Note 28: Interests in other entities

a) Subsidiaries

The Company''s subsidiaries as at 31 March 2024 are set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the Company, and the proportion of ownership interests held equals the voting rights held by the company. The country of incorporation or registration is also their principal place of business

The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the Registration Cancellation certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from concerned authorities. The Company received winding up order for Zenotech Laboratories Nigeria Limited during FY: 2019-20

The managerial personnel are covered by the Company''s gratuity policy and Mediclaim insurance policy taken and are eligible for leave encashment along with other employees of the Company. The proportionate premium paid towards these policies and provision made for leave encashment/ gratuity pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

Note 30:

a) Update on the events and circumstances relating to on-going differences with Late Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company.

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited (taken over by Sun Pharmaceutical Industries Limited effective from 24 March 2015 pursuant to a merger scheme herein after referred to as the “current promoters”) there were disagreements on various accounts between Late Dr. Jayaram Chigurupati and Ranbaxy Laboratories Limited/Daiichi Sankyo Company Limited resulting in various legal cases being filed by both the parties before various forums. The Management was denied access to the factory and other premises of the Company due to which a legal case was filed before the Company Law Board (CLB), Chennai, for taking over the physical possession of the factory premises from Late Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company. Owing to the protracted legal case, the physical possession of the factory premises could be taken over on November 13, 2011 in the presence of CLB appointed Advocate Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the gaining of the possession of the factory premises, further assessment by the Management revealed that, among others, certain books and records, supplementary documents and statutory registers till the period 12 November 2011 were missing and which are still not in the possession of the Company. The Honourable Company Law Board vide order dated 8 October 2012 further directed the erstwhile Promoter and Managing Director of the Company to return all the documents and provide written details of all missing documents/ assets/ statutory records / equipment of the Company. The Honourable High Court of Andhra Pradesh has also passed a similar order. The Company has not yet received any of these documents/ information.

The Management, therefore, based on the available limited records, statutory returns filed, supplementary documents, invoices, external corroborative evidence and after considering the various non compliances under the Companies Act, 1956, listing agreement and Foreign Exchange Management Act, etc. post 12 November 2011, reconstructed financial statements for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several financial and non-financial irregularities are sub-judice and various legal proceedings are on-going, any further adjustments / disclosures to the financial statements, if required, would be made in the financial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments / disclosures are identifiable/ determinable.

Accordingly, based on the steps taken by the Company and evidence available so far, any financial impact on the results of the Company is likely to be significantly low

b) Investment in subsidiaries:

Upon obtaining control of the Company, the Management observed that no books of account and records were available regarding its overseas subsidiaries. The management has not received any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certificates related to Forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential and financial consequences arising out of such on-going evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable. Meanwhile, the Company received the winding up order for its defunct subsidiary in Nigeria in FY: 2019-20 and the Company is in the process of filing related reports with RBI. The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/ revoked respectively based on the Registration Cancellation certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from concerned authorities.

Note 31: Contingent assets and liabilities

(i). Contingent liabilities

Particulars	As at 31 March, 2024	As at 31 March, 2023
(a) Claims against the Company not acknowledged as debt
Employee claims towards Gratuity	1,860	1,860
Total (a)	1,860	1,860
(b) Guarantees
Bank Guarantees issued on behalf of third parties	-	-
Total (b)	-	-
(c) Other matters for which the Company is contingently liable
Income Tax	25,769	74,922
Customs & Central Excise	104,640	104,640
Total ( c)	130,409	179,562

Legal cases filed by/against the Company

a) . During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition

under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the earlier years, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security.

During the year ended March 31, 2018, Company has repaid all the amount due to TDB ( excluding Interest) based on the settlement agreement by the DRC (Dispute Resolution Committee). The Interest liability will depend upon the liability payable less the shares sold in the open market by TDB (Pledged shares)

b) . The Company has filed certain legal cases before the appropriate forum against the erstwhile promoter

and managing director with regard to loss of vehicles, missing records including intellectual property, unauthorised use of the name & Logo of the Company and certain missing DNA clones.

c) . Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories

Limited (now Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, erstwhile promoter and one or two other shareholders filed a petition in the Hon''ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection

with the offer was given by the Hon''ble High Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including erstwhile promoter of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down erstwhile promoters'' complaint. SAT directed DS to price the open offer at Rs 160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favour of DS and allowed the open offer to be made at the price of Rs 113.62 per share.

In June 2012, erstwhile promoter has filed a writ petition before Honourable Andhra Pradesh High Court against Foreign Investment Promotion Board and DS challenging acquisition of 20% shares of the Company by DS through an open offer.

d) . In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary

course of business including litigation before various tax authorities. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e) . Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

f) . During the A.Y 2020-21 service tax dispute was settled under sabka vishwas scheme which was claimed

as an expense u/s.43B. However the settled amount has been disallowed u/s 143(1)(a) and demand intimation was issued for Rs 2,04,79,333. The company has filed an appeal with commissioner challenging the disallowance made

g) . Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

a) . No proceeding have been initiated or pending against the Company under the Benami Transactions

(Prohibitions) Act, 1988 (45 of 1988) and the Rules made thereunder.

b) . The Company has not traded or invested in crypto currency or virtual currency during the financial year.

c) . The Company has not granted any loans or advances in the nature of loans to promoters, directors and

KMPs, either severally or jointly with any other person.

d) . The Company does not have any transaction which is not recorded in the books of accounts that has been

surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

e) . The Company has not been sanctioned working capital limits from banks or financial institutions during any

point of time of the year on the basis of security of current assets.

f) . The Company has not been declared wilful defaulter by any bank or financial institution or government or

any other government authorities.

g) . The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including

foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

h) . The company has not received any fund from any person(s) or entity(ies), including foreign entities

(Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

i) . The Company does not have any transactions with struck off companies.

j) . The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond

the statutory period.

k) . The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act

read with the Companies. (Restriction on number of Layers) Rules, 2017

l) . No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to

237 of the Companies Act, 2013.

m) . The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible

assets or both during the current or previous year.

n) . The Company has not declared or paid dividend during the year 2023-24.

o) . The Company does not hold any investment property and hence the disclosure on fair valuation of

investment property is not applicable to the Company.

Note 37

The company uses Tally with audit trail (edit log) version as its books of accounts at the application layer and is operational as on the date of balance sheet. The software is such that it has no database but only objects and collections, hence, no changes are possible at that level.

The company has maintained tally back up electronically and have full backup as on the date of balance sheet.

Note 38:

Previous year''s figures have been regrouped, wherever necessary, to conform to current year''s grouping. Note 39:

The financial statements were approved by the board of directors on May 1,2024.

---

Mar 31, 2023

Considered as Subsidiaries only for the limited purpose of Companies Act basis voting rights and not as per Ind AS 110 on Consolidated Financial Statements

The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the Registration Cancellation certificate dated 8^th June, 2022 and Long Form Standing certificate dated 15^th June, 2022 respectively, received from concerned authorities. The Company received winding up order for Zenotech Laboratories Nigeria Limited during FY: 2019-20.However, related filings with RBI is pending.

Terms/rights attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. On winding up of the Company, the holders of equity shares will be entitled to receive residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held by the shareholders.

Aggregate number of shares allotted as fully paid pursuant to contracts without payment being received in cash, bonus shares and shares bought back for period of 5 years immediately preceding balance sheet date Nil (Previous year: NIL)

During the year ended March 31, 2023, the amount of per share dividend recognised as distribution to equity shareholders was NIL (Previous year: NIL)

Nature and purpose of each reserve

Securities premium - The amount received in excess of face value of the equity shares is recognised in securities premium. It is utilised in accordance with the provisions of the Companies Act, 2013

Retained Earnings -This reserve represents undistributed accumulated earnings of the company as on balance sheet date.

The Company had repaid the principal loan amount of Rs.29,648 to Technology Development Board (TDB) during the year 2017-18. However, Rs. 27,645 towards Interest due is payable to TDB subject to realisation of 6,00,000 shares of Late.Dr. Jayaram Chigurupati held by TDB as security against the secured loan, as per the settlement agreement dated 22nd February, 2018 signed between the Company and TDB

Terms:

Loan from related party is availed with interest at the rate of 9% per annum on the principal amount outstanding. The interest shall be paid at the last day of every calendar quarter. However, any interest remaining unpaid at the end of financial year shall be added to the principal amount. Total Loan or any portion of the Loan amount shall be repayable at the option of the Company at any time or from time to time during the Loan Period (i.e., 3 years calculated from 24th Feb, 2021 (Effective Date)). During the current year the company entirely repaid the balance loan of Rs. 60,000/- along with an interest of Rs.1,122/-

b) Leave Obligation

The actuarial valuation has been carried out using the Projected Unit Credit Method. Under this method, the Defined Benefit Obligation is calculated taking into account pattern of availment of leave whilst in service and qualifying salary on the date of availment of leave. In respect of encashment of leave, the Defined Benefit Obligation is calculated taking into account all types of decrement and qualifying salary projected up to the assumed date of encashment.

c) Gratuity (Unfunded)

The Company has a defined benefit gratuity plan governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to gratuity on departure at 15 days last drawn salary for each completed year of service or part thereof in excess of six months

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

A) Credit Risk

As the Company currently deals only with the parent entity, it is not exposed to any credit risk as on the reporting date

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

Management monitors rolling forecasts of the companies'' liquidity position comprising the cash and cash equivalents on the basis of expected cash flows.

i) Financial Arrangements NIL

ii) Maturities of financial liabilities

The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

There are no derivatives financial liabilities for the company.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

C) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument may result from changes in the foreign currencies, exchange ratios, interest ratio, credit, liquidity and other market changes. However, currency risk and the interest risk are not significant to the Company since, the Company has only Indian rupee borrowings which is medium term in nature.

note 26 (a) Operating lease

Operating leases, in which the Company is the lessor, relate to equipments owned by the Company with lease terms up to 7 years. The agreement can be terminated any time by Lessor/ Lessee by giving 60 days prior written notice. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

The company''s objectives when managing capital are to:

> Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

> Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Note 27: Operating Segment Disclosure

As per Ind AS 108 segment information to be presented from management''s perspective, which means it is presented in the way used in internal reporting. The basis for identifying reportable segments is internal reporting as it is reported to and followed up on by the chief operating decision maker (CODM). The Company has, in this context, identified the Chief Executive Officer of the company as the chief operating decision maker. The chief executive officer of the Company is responsible for allocating resources and assessing performance of the operating segments and accordingly is identified as the chief operating decision maker. The Chief Executive Officer evaluates the operating segments'' results on the basis of revenue and gross profit as the performance indicator for all of the operating segments, and does not review the total assets and liabilities of an operating segment as it is not provided regularly to CODM for review.

Zenotech Laboratories Limited is engaged in single business activity of Pharmaceuticals and the company does not have multiple operating segments. Other than revenue analysis that is disclosed in Note (21), no operating results and other discrete financial information is available for the assessment of performance of the respective business divisions and resources allocation purpose.

Major Customer Dependency

Entire portion of the operating revenue earned by the Company is from single customer i.e., Sun Pharma Group. In the current year, revenue earned from Sun Pharmaceutical Industries Limited is 100% (PY:100%) of the total revenue for the year.

Note 28: interests in other entities

a) Subsidiaries

The Company''s subsidiaries as at 31 March 2023 are set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the Company, and the proportion of ownership interests held equals the voting rights held by the company. The country of incorporation or registration is also their principal place of business

The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the Registration Cancellation certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from concerned authorities. The Company received winding up order for Zenotech Laboratories Nigeria Limited during FY: 2019-20

The managerial personnel are covered by the Company’s gratuity policy and Mediclaim insurance policy taken and are eligible for leave encashment along with other employees of the Company. The proportionate premium paid towards these policies and provision made for leave encashment/ gratuity pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

a) Update on the events and circumstances relating to on-going differences with Late Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company.

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited (taken over by Sun Pharmaceutical Industries Limited effective from 24 March 2015 pursuant to a merger scheme herein after referred to as the “current promoters”) there were disagreements on various accounts between Late Dr. Jayaram Chigurupati and Ranbaxy Laboratories Limited/Daiichi Sankyo Company Limited resulting in various legal cases being filed by both the parties before various forums. The Management was denied access to the factory and other premises of the Company due to which a legal case was filed before the Company Law Board (CLB), Chennai, for taking over the physical possession of the factory premises from Late Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company. Owing to the protracted legal case, the physical possession of the factory premises could be taken over on November 13, 2011 in the presence of CLB appointed Advocate Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the gaining of the possession of the factory premises, further assessment by the Management revealed that, among others, certain books and records, supplementary documents and statutory registers till the period 12 November 2011 were missing and which are still not in the possession of the Company. The Honourable Company Law Board vide order dated 8 October 2012 further directed the erstwhile Promoter and Managing Director of the Company to return all the documents and provide written details of all missing documents/ assets/ statutory records / equipment of the Company. The Honourable High Court of Andhra Pradesh has also passed a similar order. The Company has not yet received any of these documents/ information.

The Management, therefore, based on the available limited records, statutory returns filed, supplementary documents, invoices, external corroborative evidence and after considering the various non compliances under the Companies Act, 1956, listing agreement and Foreign Exchange Management Act, etc. post 12 November 2011, reconstructed financial statements for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several financial and non-financial irregularities are sub-judice and various legal proceedings are on-going, any further adjustments / disclosures to the financial statements, if required, would be made in the financial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments / disclosures are identifiable/ determinable.

Accordingly, based on the steps taken by the Company and evidence available so far, any financial impact on the results of the Company is likely to be significantly low

b) investment in subsidiaries:

Upon obtaining control of the Company, the Management observed that no books of account and records were available regarding its overseas subsidiaries. The management has not received any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certificates related to Forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential and financial consequences arising out of such on-going evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable. Meanwhile, the Company received the winding up order for its defunct subsidiary in Nigeria in FY: 2019-20 and the Company is in the process of filing related reports with RBI. The Company''s overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the Registration Cancellation certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from concerned authorities.

Note 31: Contingent assets and liabilities (i). Contingent liabilities
Particulars	As at	As at
	31 March, 2023	31 March, 2022
(a) Claims against the Company not acknowledged as debt
Employee claims towards Gratuity	1,860	1,860
Total (a)	1,860	1,860
(b) Guarantees
Bank Guarantees issued on behalf of third parties	-	-
Total (b)	-	-
(c) Other matters for which the Company is contingently liable
Income Tax	74,922	5,290
Customs & Central Excise	104,640	104,640
total(c)	179,562	109,930

Legal cases filed by/against the Company

a) . During the year ended 31 March 2011, Technology Development Board (TDB) had filed a

claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the earlier years, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security. During the year ended March 31,2018, Company has repaid all the amount due to TDB ( excluding Interest) based on the settlement agreement by the DRC (Dispute Resolution Committee). The Interest liability will depend upon the liability payable less the shares sold in the open market by TDB (Pledged shares)

b) . The Company has filed certain legal cases before the appropriate forum against the erstwhile

promoter and managing director with regard to loss of vehicles, missing records including intellectual property, unauthorised use of the name & Logo of the Company and certain missing DNA clones.

c) . Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories

Limited (now Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, erstwhile promoter and one or two other shareholders filed a petition in the Hon’ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon’ble High Court of Madras and subsequently it was quashed by the Hon’ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including erstwhile promoter of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down erstwhile promoters’ complaint. SAT directed DS to price the open offer at Rs 160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favour of DS and allowed the open offer to be made at the price of Rs 113.62 per share.

In June 2012, erstwhile promoter has filed a writ petition before Honourable Andhra Pradesh High Court against Foreign Investment Promotion Board and DS challenging acquisition of 20% shares of the Company by DS through an open offer.

d) . In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary

course of business including litigation before various tax authorities. The Company’s Management

does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company’s results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e) . Other than those disclosed, the Company has not received any significant claims post 31 March

2011.

f) . During the A.Y 2020-21 service tax dispute was settled under sabka vishwas scheme which was

claimed as an expense u/s.43B. However the settled amount has been disallowed u/s 143(1)(a) and demand intimation was issued for Rs 2,04,79,333. The company has filed an appeal with commisioner challenging the disallowance made

g) . The demand u/s 271 (1)(c) for the A.Y 2006-07 for Rs. 2,51,40,989/-and for the A.Y 2013-14 for Rs.

2,40,11,400/-was settled in favour of the Company by ITAT, Hyderabad. However, IT department filed a suit against the said order in High Court for the State of Telangana, which is pending for hearing as on 31st March, 2023.

h) . Other than those disclosed, the Company has not received any significant claims post 31 March

2011.

As at the year end, the Company''s current liabilities have exceeded its current assets by Rs. 3422 primarily on account of provision for indirect tax related cases of Rs.80,901. Management is confident of its ability to generate cash inflows from operations and also raise long term funds to meet its obligations on due date.

Note 37: Other Statutory information

a) . No proceeding have been initiated or pending against the Company under the Benami Transactions (Prohibitions)

Act, 1988 (45 of 1988) and the Rules made thereunder.

b) . The Company has not traded or invested in crypto currency or virtual currency during the financial year.

c) . The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMPs, either

severally or jointly with any other person.

d) . The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered

or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

e) . The Company has not been sanctioned working capital limits from banks or financial institutions during any point of

time of the year on the basis of security of current assets.

f) . The Company has not been declared willful defaulter by any bank or financial institution or government or any other

government authorities.

g) . The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign

entities (Intermediaries) with the understanding that the Intermediary shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

h) . The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)

with the understanding (whether recorded in writing or otherwise) that the company shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

i) . The Company does not have any transactions with struck off companies.

j) . The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory

period.

k) . The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with

the Companies. (Restriction on number of Layers) Rules, 2017

l) . No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the

Companies Act, 2013.

m) . The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets

or both during the current or previous year.

n) . The Company has not declared or paid dividend during the year 2022-23.

o) . The Company does not hold any investment property and hence the disclosure on fair valuation of investment property

is not applicable to the Company.

Note 38:

Previous year''s figures have been regrouped, wherever necessary, to conform to current year''s grouping.

Note 39:

The Standalone financial statements were approved by the board of directors on April 28, 2023.

---

Mar 31, 2018

Note 1: Interests in other entities a) Subsidiaries

The Companies subsidiaries at 31 March 2018 are set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the company, and the proportion of ownership interests held equals the voting rights held by the company. The country of incorporation or registration is also their principal place of business

During the year ended March 31, 2017, the Company had decided to wind up its overseas subsidiary namely Zenotech Pharmaceutica do Brazil Ltda in its Board Meeting dated 13th February, 2017 and Zenotech Laboratories Nigeria Limited vide its Circular Resolution dated 2nd March, 2017. There is no change in the Status as at March 31, 2018. Refer Note No. 27 (a) & (b)

b) Interest in Associates and Joint Ventures- Nil Note 26: Related party transactions

Note:

The managerial personnel are covered by the Company''s gratuity policy and Mediclaim insurance policy taken and are eligible for leave encashment along with other employees of the Company. The proportionate premium paid towards these policies and provision made for leave encashment/ gratuity pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

Note 2:

a) Update on the events and circumstances relating to on-going differences with Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company.

Post-acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited (Now taken over by Sun Pharmaceutical Industries Limited effective from 24th March 2015 pursuant to a merger scheme herein after referred to as the “current promoters”) there were disagreements on various accounts between the erstwhile promoters and the current promoters resulting in various legal cases being filed by both the parties before various forums. The current Management was denied and, therefore, could not gain access to the factory and other premises of the Company due to which a legal case was filed before the Company Law Board (CLB), Chennai, for taking over the physical possession of the factory premises from Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company. Owing to the protracted legal case, the physical possession of the factory premises could be taken over on November 13, 2011 in the presence of CLB appointed Advocate Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the gaining of the possession of the factory premises, further assessment by the current Management revealed that, among others, certain books and records, supplementary documents and statutory register till the period 12th November 2011 were missing and which are still not in the possession of the current Management. The Honourable Company Law Board vide order dated 8th October 2012 further directed Erstwhile Promoter and Managing Director of the Company to return all the documents and provide written details of all missing documents/ assets/ statutory records / equipment of the Company. The Honourable High Court of Andhra Pradesh has also passed a similar order. The Company has not yet been provided with these documents/ information.

The current Management, therefore, based on the available limited records, statutory returns filed, supplementary documents, invoices, external corroborative evidences and after considering the various non-compliances under the Companies Act, 1956, listing agreement and Foreign Exchange Management Act, etc. post 12th November 2011, reconstructed financial statements for the years ended 31st March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several financial and non-financial irregularities are sub-judice and various legal proceedings are on-going, any further adjustments / disclosures to the financial statements, if required, would be made in the financial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments / disclosures are identifiable/ determinable.

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certificates related to Forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential and financial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non-compliances which is currently not determinable. The Board has initiated the winding-up process for the defunct subsidiaries in Brazil and Nigeria.

* Legal cases filed by/against the Company

a. During the year ended 31st March 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the earlier years, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security. Subsequently, during the current year ended March 31, 2018, company has repaid all the amount due to TDB ( excluding Interest) based on the settlement agreement signed between the Company and DRC (Dispute Resolution Committee). The Interest liability will depend upon the amount payable less the shares sold in the open market by TDB (Pledged shares)

b. The Company has filed certain legal cases before the appropriate forum against the erstwhile promoter and managing director with regard to loss of vehicles, missing records including intellectual property, unauthorized use of the name & Logo of the Company and certain missing DNA clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories Limited (now Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholders filed a petition in the Hon''ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon''ble High Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including erstwhile promoter of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down erstwhile promoters'' complaint. SAT directed DS to price the open offer at Rs 160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favour of DS and allowed the open offer to be made at the price of Rs 113.62 per share.

In June 2012, erstwhile promoter has filed a writ petition before Honourable Andhra Pradesh High Court against ineralia Foreign Investment Promotion Board and Daiichi Sankyo Company Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

d. In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before various tax authorities. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e. Other than those disclosed, the Company has not received any significant claims post 31st March 2011.

(b) Contingent assets: Nil

Note 3:

During the year, there is an outstanding amount of Rs. 80,901 (Previous year: Rs. 104,185) towards expenses relating to unfulfilled export obligation under the Export Promotion Capital Goods Scheme. The Company has accrued these amounts based on the best estimates of the potential obligation based on the information available with it currently.

Note 4:

Deferred Tax: Deferred Tax is provided using the liability method on temporary differences between the tax base of assets and liabilities and their carrying amounts for financial reporting purpose at the reporting date. The Company has significant amount of outstanding business loss and unabsorbed deprecation. In absence of probability on availability of taxable profit against which these temporary differences can be utilized. The company has not recorded the cumulative deferred tax assets as on March 31, 2017 amounting to Rs 447, 439 arising on account of timing differences, as stipulated in Ind AS 12- Income Taxes.

---

Mar 31, 2016

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certificates related to forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential financial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable.

c). As of 31 March 2016, the net worth of the Company continues to be negative. During the year, the Company’s reference to the Board for Industrial and Financial Reconstruction (BIFR) had already been registered as case no. 115/2015 under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985.

1. Managerial Remuneration

a. The Company had filed an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs. 3,000 thousands payable to Late B. K. Raizada, erstwhile co-Managing Director for the period from 19 March 2011 to 18 March 2013. This has conditionally approved by MCA on 27 February, 2012. Pending compliance with the conditional approval by the Company, no adjustment in this regard has been made in the accompanying financials.

b. The current Management had filed a case in the Court of the Hon’ble Chief Judge City Civil Court at Hyderabad for recovery of managerial remuneration aggregating to Rs. 7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

d. In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before various tax authorities. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e. Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

2. Deferred Taxation:

The Company has significant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realisation, the Company has not recorded the cumulative deferred tax asset as on 31 March 2016 and for the year arising on account of timing differences, as stipulated in Accounting Standard (AS) 22 -Accounting for taxes on income.

3 Employee Stock Option Scheme

Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs. 1.22 lakhs received towards this was grouped under " Share application money pending allotment" until last year. During the year this money has been refunded to the respective holders.

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

4. Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2016 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

5 Segment information

The Company is engaged in a business of manufacture and trading of pharmaceuticals products and is governed by a similar set of risks and returns. The operations of the Company substantially are confined to in India. Hence, in the view of the management the entity operates in only one business segment, ‘Pharmaceuticals’ and in one geographical segment, ‘In India’. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

6 Pursuant to the Companies Act 2013 ( the ‘Act’), being effective from 1st April 2014, the Company has reassessed useful life of its fixed assets which coincide with the useful life specified in Part ‘C’ of Schedule II of the Act. As a result of this change, the deprecation charge for the year ended 31st March 2015 is higher by Rs 5,094. In respect of those assets whose useful life is already exhausted as on 1 April 2014, deprecation of Rs 924 has been adjusted in Reserves and Surplus in accordance with the requirements of Schedule II of the Act.

7 During the current and previous years, the company has accrued certain amounts to Rs 144,626 towards expenses relating to fees for the USFDA for 2013 and 2014 and unfulfilled export obligation under the Export Promotion Capital Goods Scheme. The Company has accrued these amounts based on the best estimates of the potential obligation based on the information available with it currently.

8 Previous year figures have been reworked, regrouped, reclassified and rearranged wherever necessary to make them comparable with the current year figures.

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Mar 31, 2015

1. a) Update on the events and circumstances relating to ongoing differences with Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company.

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited (a division of Sun Pharmaceutical Industries Limited effective from 24 March 2015 pursuant to a merger scheme) and Daiichi Sankyo Company Limited (herein after referred to as the "current promoters") there were disagreements on various accounts between the erstwhile promoters and the current promoters resulting in various legal cases being filed by both the parties before various forums. The current Management was denied and, therefore, could not gain access to the factory and other premises of the Company due to which a legal case was filed before the Company Law Board (CLB), Chennai, for taking over the physical possession of the factory premises from Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company. Owing to the protracted legal case, the physical possession of the factory premises could be taken over on November 13, 2011 in the presence of CLB appointed Advocate Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the gaining of the possession of the factory premises, further assessment by the current Management revealed that, among others, certain books and records, supplementary documents and statutory register till the period 12 November 2011 were missing and which are still not in the possession of the current Management. The Honorable Company Law Board vide order dated 8 October 2012 further directed Erstwhile Promoter and Managing Director of the Company to return all the documents and provide written details of all missing documents/assets/statutory records/equipment of the Company. The Honorable High Court of Andhra Pradesh has also passed a similar order. The Company has not yet been provided with these documents/information.

The current Management, therefore, based on the available limited records, statutory returns filed, supplementary documents, invoices, external corroborative evidence and after considering the various non compliances under the Companies Act, 1956, listing agreement and Foreign Exchange Management Act, etc post 12 November 2011, reconstructed financial statements for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several financial and non financial irregularities are sub-judice and various legal proceedings are ongoing, any further adjustments/disclosures to the financial statements, if required, would be made in the financial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments/disclosures are identifiable/ determinable.

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents/certificates related to forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential financial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable.

c) As of 31 March 2015, total net worth of the Company has been completely eroded. The Board of Directors has formed an opinion that the Company has become a Sick Industrial Company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and necessary reference shall be made to the Board for Industrial and Financial Reconstruction (BIFR) in due course of time.

2. Managerial Remuneration

a. The Company had filed an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs. 3,000 thousands payable to Late B. K. Raizada, erstwhile co-Managing Director for the period from 19 March 2011 to 18 March 2013. This application pending approval.

b. The current Management had filed a case in the Court of the Hon'ble Chief Judge City Civil Court at Hyderabad for recovery of managerial remuneration aggregating to Rs. 7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

a. During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the previous year, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security.

b. In addition to the legal claim as mentioned in note 2.26 (b) above, the Company has filed certain legal cases before the appropriate forum against the erstwhile promoter and managing director with regard to loss of vehicles, missing records including intellectual property, unauthorized use of the name of the Company and certain missing mammalian clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories Limited (now a division of Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholder filed a petition in the Hon'ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon'ble High Court of Madras and subsequently it was quashed by the Hon'ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including promoter of the Company fi led a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down Erstwhile Promoters' complaint. SAT directed DS to price the open offer at Rs 160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favor of DS and allowed the open offer to be made at the price of Rs 113.62 per share.

In June 2012, Erstwhile promoter has fi led a writ petition before Honorable Andhra Pradesh High Court against interlaid Foreign Investment Promotion Board and Daiichi Sankyo Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

d. In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before various tax authorities. The Company's Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company's results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e. Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

3. Deferred Taxation:

The Company has significant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realization, the Company has not recorded the cumulative deferred tax asset as on 31 March 2015 and for the year arising on account of timing differences, as stipulated in Accounting Standard (AS) 22 – Accounting for taxes on income.

4. Employee Stock Option Scheme

a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs. 1.22 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

5. Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Offi ce Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after fi ling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2015 has been made in the fi nancial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

6. During the year, the Company has accrued certain amounts aggregating to Rs. 129,058 towards expenses relating to fees for US FDA for 2013 and 2014 and unfulfilled export obligation under the Export Promotion Capital Goods scheme. The Company has accrued these amounts based on the best estimates of the potential obligation based on the information available with it currently.

7. Pursuant to the Companies Act 2013 (the 'Act'), being effective from 1st April 2014, the Company has reassessed useful life of its fixed assets which coincide with the useful life specified in Part 'C' of Schedule II of the Act. As a result of this change, the depreciation charge for the year ended 31 March 2015 is higher by Rs. 5,094. In respect of those assets whose useful life is already exhausted as on 1 April 2014, depreciation of Rs. 924 has been adjusted in Reserve and Surplus in accordance with the requirements of Schedule II of the Act.

8. Segment information

The Company is engaged in a business of manufacture and trading of Pharmaceutical products and is governed by a similar set of risks and returns. The operations of the Company substantially are confi ned to in India. Hence, in the view of the management the entity operates in only one business segment, 'Pharmaceutical' and in one geographical segment, 'In India'. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

9. The Company has reclassifi ed the previous year fi gures to confi rm to current year's classifi cation.

---

Mar 31, 2014

1.1 Managerial Remuneration

a. The Company had filed an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs.3,000 thousands payable to Mr. B. K. Raizada, co-Managing Director for the period from 19 March 2011 to 18 March 2013. This application pending approval.

b. The current Management had filed a case in the Court of the Hon''ble Chief Judge City Civil Court at Hyderabad to for recovery of managerial remuneration aggregating to Rs.7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

1.2 Contingent liabilities and commitments

As at As at 31 March 2014 31 March 2013

Contingent liabilities

i) Claims against the company not acknowledged as debt 12,064 12,064

ii) Bank guarantees 8,135 11,688

iii) Other matters* *Legal cases filed by/against the Company

a. During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement.The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the year, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferrd to TDB which were pledged as security.

b. In addition to the legal claim as mentioned in note 2.26 (b) above, the Company has filed certain legal cases before the appropriate forum against the erstwhile promoter and managing director with regard to loss of vehicles, missing records inlcuding intellectual property, unauthorised use of the name of the Company and certain missing mammalian clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs.113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholder filed a petition in the Hon''ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon''ble High Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including promoter of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down Erstwhile Promoters'' complaint. SAT directed DS to price the open offer at Rs.160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favor of DS and allowed the open offer to be made at the price of Rs.113.62 per share.

In June 2012, Erstwhile promoter has filed a writ petition before Honorable Andhra Pradesh High Court against ineralia Foreign Investment Promotion Board and Daiichi Sankyo Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

1.3 Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense under cancellable operating leases was Rs.Nil (previous year: Rs.217) which has been disclosed as ''Rent'' in the statement of profit and loss.

1.4 Deferred Taxation:

The Company has significant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realisation, the Company has not recorded the cumulative deferred tax asset as on 31 March 2014 and for the year arising on account of timing differences, as stipulated in Accounting Standard (AS) 22 – Accounting for taxes on income.

1.5 Employee Stock Option Scheme

a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs.1.22 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

Provision for indirect taxes are in respect of which the claims are pending before various tax authorities for a considerable period of time and based on management''s estimate of claims provision is made on prudent basis that possible outflow of resources may arise in future.

1.6 Employee benefit plans

The Company has a defined benefit gratuity plan which is presently unfunded. The components of net gratuity expense recognised in the statement of profit and loss and amounts recognised in the balance sheet for the gratuity plans is as provided below.

Discount rate: The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

1.7 Related party transactions

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notified by the Companies (Accounting Standards) Rules, 2006.

a) Name of the Related Party* Relationship

Ranbaxy Laboratories Limited Entity holding more than 20%

Daiichi Sankyo Company Limited Entity holding 20%

Zenotech Farmaceutica Do Brasil Limiteda, Brazil Subsidiary Zenotech Laboratories Nigeria Limited, Nigeria Subsidiary

Zenotech, Inc., USA Subsidiary

Dr. Jayaram Chigurupati – Co-Managing Director*** Erstwhile Promoter and Key Management Personnel** Mr. Bimal K Raizada – Co-Managing Director Key Management Personnel

* The Company did not have a complete list of related parties due to absence of non receipt of form 24AA "Notice by the Interested Directors" from one of its directors namely Dr. Jayaram Chigurupati under Section 299 of the Companies Act, 1956 for the previous year ended 31 March 2013. Parties identified and disclosed related to these is based on earlier years audited financial statements.

** Consequence to completion of open offer formalities by Daiichi Sankyo Company Limited in September 2010, Dr. Jayaram Chigurupati and Associates ceased to be promoters.

*** Ceased to be as Managing Directors w.e.f 1 October 2012 on completion of the five year term as per reappointment approved in the Annual General Meeting dated 8 November 2007 and ceased to be as Director of the Company w.e.f. 28 December 2012.

1.8 Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2014 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

1.9 Segment information

The Company is engaged in a business of manufacture and trading of pharmaceuticals products and is governed by a similar set of risks and returns. The operations of the Company substantially are confined to in India. Hence, in the view of the management the entity operates in only one business segment, ''Pharmaceuticals'' and in one geographical segment, ''In India''. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

1.10 The Company has reclassified the previous year figures to confirm to current year''s classification.

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Mar 31, 2013

1.1 a) Update on the events and circumstances relating to ongoing differences with the erstwhile co- Managing directors

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited (herein after referred to as the "Current promoters") there were disagreements on various accounts between the erstwhile promoters and the current promoters resulting in various petitions/cases being fi led by both the parties at various forums. The petition resulted in a protracted legal case with the Company Law Board (CLB) for taking physical possession of the factory premises on 13 November 2011.

As a result, certain books and records, supplementary documents and statutory register till the period 12 November 2011 are still not in the possession of the current Management. The Honorable Company Law Board vide its order dated 8 October 2012 also directed Erstwhile Promoter to return all the documents and provide written details of all missing documents/ assets/ statutory records / equipment of the Company. The Honorable High Court of Andhra Pradesh has also passed similar order.

The current Management therefore had based on the available limited records, statutory return fi led, supplementary documents, invoices, external corroborative evidence and after considering the various non compliances under the Companies Act, 1956 and listing agreement etc reconstructed fi nancial statement for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several fi nancial and non fi nancial irregularities are sub-judice and various legal proceedings are ongoing, any further adjustments / disclosures to the fi nancial statements, if required, would be made in the fi nancial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments / disclosures are identifi able/ determinable.

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile co-managing director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certifi cates related to forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential fi nancial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable.

c) The Company has fi led required declaration under the Sick Industrial Companies (Special Provisions) Act, 1985 with the Board of Industrial and Financial Reconstruction (BIFR) for potential sickness as the net worth of the Company has been eroded by more than fi fty percent. The Management is in the process of taking all required steps to revive the Company and to increase the net worth including other steps as may be suggested by the BIFR from time to time.

1.2 Managerial Remuneration

a. The Company had fi led an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs.. 3,000 thousands payable to Mr. B. K. Raizada, co-Managing Director for the period from 19 March 2011 to 18 March 2013. This application pending approval.

b. The current Management had fi led a case in the Court of the Hon''ble Chief Judge City Civil Court at Hyderabad to for recovery of managerial remuneration aggregating to Rs.. 7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

* Legal cases fi led by/against the Company

a. During the year ended 31 March 2011, Technology Development Board (TDB) had fi led a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. TDB had issued a notice dated 3 April 2012 to erstwhile Co-Managing Director to settle the dues payable by the Company within 15 days failing which, TDB was to sell 600,000 equity shares of the Company held pledged as security by him. The said notice was stayed by Hon''ble Andhra Pradesh High Court until further orders, in view of his fi ling of Writ Petition. The Arbitrator has issued an order with direction to the Company and erstwhile Co Managing director to pay individually or jointly the outstanding dues to TDB.

b. In addition to the legal claim as mentioned in note 2.27 (b) above, the Company has fi led certain legal cases before the appropriate forum against the erstwhile promoter / erstwhile Co Managing Director with regard to loss of vehicles, missing records inlcuding intellectual property, unauthorised use of the name of the Company and certain missing mammalian clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs.. 113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholder fi led a petition in the Hon''ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon''ble High Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition fi led by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including promoter of the Company fi led a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down Erstwhile Promoters'' complaint. SAT directed DS to price the open offer at Rs. 160 per share. DS has fi led an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favor of DS and allowed the open offer to be made at the price of Rs. 113.62 per share.

In June 2012, Erstwhile promoter has fi led a writ petition before Honorable Andhra Pradesh High Court against ineralia Foreign Investment Promotion Board and Daiichi Sankyo Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

1.3 Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense under cancellable operating leases was Rs..217 (previous year: Rs.. 1,145) which has been disclosed as ‘Rent'' in the statement of profi t and loss.

1.4 Deferred Taxation:

The Company has signifi cant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realisation, the Company has not recorded the cumulative deferred tax asset as on 31 March 2013 and for the year arising on account of timing differences, as stipulated in Accounting Standard(AS) 22 – Accounting for taxes on income.

1.5 Employee Stock Option Scheme

a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs.. 1.22 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

1.6 Employee benefi t plans

The Company has a defi ned benefi t gratuity plan which is presently unfunded. The components of net gratuity expense recognised in the statement of profi t and loss and amounts recognised in the balance sheet for the gratuity plans is as provided below.

1.7 Related party transactions

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notifi ed by the Companies (Accounting Standards) Rules, 2006.

* The Company does not have a complete list of related parties due to absence of non receipt of form 24AA "Notice by the Interested Directors" from one of its directors namely Dr. Jayaram Chigurupati under Section 299 of the Companies Act, 1956 for the year ended 31 March 2013 and for the year ended 31 March 2012. Parties identifi ed and disclosed related to these is based on earlier years audited fi nancial statements.

** Consequence to completion of open offer formalities by Daiichi Sankyo Company Limited in September 2010, Dr. Jayaram Chigurupati and Associates ceased to be promoters.

*** Ceased to be as Managing Directors w.e.f 1 October 2012 on completion of the fi ve year term as per reappointment approved in the Annual General Meeting dated 8 November 2007 and ceased to be as Director of the Company w.e.f. 28 December 2012.

1.8 Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Offi ce Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after fi ling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2013 has been made in the fi nancial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

1.9 Segment information

The Company''s business activity falls within a single primary business segment viz. ‘Pharmaceuticals'' and in India only. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

1.10 The Company has reclassifi ed the previous year fi gures to confi rm to current year''s classifi cation.

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Mar 31, 2011

1. Fixed assets impaired

2. Capital work in progress impaired

3. Corporate costs incurred

4. Investments written down

5. Doubtful loans and advances provided for

6. Doubtful debtors provided for and

7. Provisions for demands towards disputed matters

The current management based on the steps taken by it, disclosures made, and supporting documents, evidence available from subsequent events believes that in its assessment the risk that the financial statements are materially misstated is not significant. These financial statements has been considered and approved by the Board of Directors in their meeting conducted in Hyderabad, India on May 19, 2012.

c. Legal cases filed by the Company on account of the ongoing dispute with the co-managing director

i. The current Management has filed a case with the Hon'ble Metropolitan Magistrate with regard to the loss of vehicles / technical data / missing records etc., against certain employees of the Company including Co- Managing Director under applicable provisions of the Indian Penal Code for which the complaints have been registered with the concerned police authorities and the investigation is under process.

ii. The current Management has filed a case against Co-Managing Director in the Court of the Hon'ble Chief Judge City Civil Court at Hyderabad for receipt of managerial remuneration aggregating to Rs. 7,980 thousands during the period from October 1, 2007 to March 31, 2011 from the Company, in contravention of the provisions of the Companies Act.

iii. The current management has filed a suit against Co- Managing Director for passing off and illegal use of the name 'Zenotech' in his personally owned entity 'Zenotech LLC', a US incorporated LLC.

iv. The Company received a letter dated January 9, 2012 from Bombay Stock Exchange (BSE) stating, inter- alia, that the Company had defaulted in compliance with various clauses of listing agreement and requiring the Company to show cause as to why appropriate action including suspension of trading of securities of the Company should not be taken against it. The Company informed to BSE about reason of non compliance and corrective measures taken by it. However, BSE, vide its public notice dated March 27, 2012 proposed to suspend the trading of the Company's scrips effective from April 20, 2012, unless all the compliances under listing agreement were made good subject to the satisfaction of BSE. The Company filed a writ petition before Hon'ble Andhra Pradesh High Court wherein the Hon'ble Court suspended the operation of the above public notice, in so far it relates to the suspension of the trading of the shares of the Company. As a result the trading of the Company's scrip was restored from April 23, 2012 on the BSE.

Note: Having regards to the fact that Gratuity is a defined benefit accrued based on actuarial valuation the amount applicable to an individual employee is not ascertainable and accordingly, has not been considered in the above computation.

8. Contingent liabilities:

Particulars As at As at March 31, 2011 March 31, 2010

i. Liability in respect of Bank guarantees 11,688 11,888

ii. Legal cases filed against Company by Technology Development Board

During the year ended March 31, 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The matter had been heard and the Arbitrator has reserved the Award. In the mean time, TDB has issued a notice dated April 3, 2012 to Co Managing Director to settle the dues payable by the Company within 15 days failing which, TDB will sell 600,000 equity shares of the Company held pledged as security by him. The said notice was stayed by Hon'ble Andhra Pradesh High Court until further orders, in view of his filing of Writ Petition and the matter is expected to be heard in June 2012.

iii. Arbitration matter against Ranbaxy Pharmaceuticals Inc.

During the year ended March 31, 2011, the Company initiated arbitration matter against Ranbaxy Pharmaceuticals Inc., USA under development and supply contract of certain Injectible products. The arbitration matter was dismissed vide interim order dated November 14, 2011 by arbitrator and the Company was ordered to pay administrative fees, costs and expenses including the fees and expenses of legal counsel incurred etc. vide final adjudication on March 20, 2012. The Company is awaiting for the final claim. Currently, the Company is not able to quantify amount of claim. Further, the management will initiate proceeding to recover the said amount as and when same is determined, from Co-Managing Director of the Company. Accordingly no provision has been made in the books of account.

09. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for, as at March 31, 2011 is Rs. Nil (March 31, 2010: Rs. Nil).

10. Capital work-in-progress includes capital advances of Rs. Nil (March 31, 2010 Rs. Nil)

11. Amounts payable to Micro, Small and Medium enterprises:

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2011 has been made in the financial statements based on information received and available with the Company. Further as per the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

12. Segment reporting:

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals in India. Hence, in the view of the management the entity operates in only one business segment, 'Pharmaceutical manufacturing and trading' and in one geographical segment, 'In India'. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

13. Deferred taxation:

In view of the brought forwards losses and no taxable income for the current year, the company has not recorded the cumulative deferred tax liability/asset as on March 31, 2011 and for the year arising on account of timing differences, as stipulated in Accounting Standard(AS) 22 - Accounting for taxes on income.

* The Company does not have a complete list of related parties due to absence of non receipt of form 24AA "Notice by the Interested Directors" from two of its directors namely Mr. A Raghu Vasu and Dr. Jayaram Chigurupati under Section 299 of the Companies Act, 1956 during the year. Parties identified and disclosed related to these is based on previous year audited financial statements.

** Consequence to completion of open offer formalities by Daiichi in September 2010, Dr. Jayaram Chigurupati and Associates ceased to be promoters, however, Dr. Jayaram Chigurupati continues to be Co-Managing Director of the Company.

14. Employee stock option scheme:

a) Under the Zenotech Employee Stock Option Scheme 2005, the Company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10. Of these, the Company allotted 2,500 shares and balance is pending for allotment. Accordingly Rs. 122 thousands received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

* Department of Industrial Policy and Promotion, Ministry of Commerce and Industry vide its Notification S.O.1386 (E) dated September 23, 2005 has omitted Drugs and Pharmaceuticals from the Scheduled List. Licensed capacity as given above is based on Licenses/Letter of Intent obtained earlier.

15. Previous year Figures of the previous year have been regrouped / recast wherever necessary to compare with current year's classification. The figures of previous year were audited by a firm of Chartered accountants other than B S R & Associates. Current year financial statements are prepared under old Schedule VI as Revised Schedule VI is applicable for financial year commencing on or after April 1, 2011.

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Mar 31, 2010

1. Contingent liabilities Rs. in lakhs

As at As at March 31, 2010 March 31,2009

Liability in respect of Bank guarantees 118.88 116.96

Liability in respect of Letter of credits - 48.33

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for, as at March 31, 2010 is Rs. Nil (March 31, 2009: Rs. 20.56 lakhs).

3. Capital work-in-progress includes capital advances of Rs. Nil (March 31, 2009 Rs.24.44 lakhs)

4. Sundry Creditors:

The Company has not received any confirmation from "suppliers" regarding their status under the Micro and Small Enterprises Development Act 2006 and hence disclosures, if any, relating to amount unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

5. Segment reporting:

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals in India, which in the context of Accounting Standard (AS) 17 - "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006 is considered the only business segment.

6. Taxation:

In view of the brought forwards losses and no taxable income for the current year, the company has not recorded the cumulative deferred tax liability/asset as on March 31, 2009 and for the year arising on account of timing differences, as stipulated in Accounting Standard(AS) 22 - Accounting for taxes on income.

7. Related Party Disclosures:

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notified by the Companies (Accounting Standards) Rules, 2006.

(A) Name of the Related Party Relationship

Zenotech Farmaceutica Do Brasil Limiteda, Brazil (ZFDBL) "I

Zenotech Laboratories Nigeria Limited, Nigeria (ZLNL) > Subsidiary

Zenotech, Inc., USA J

Credence Organics Private Limited (COPL) Associate

Ranbaxy Laboratories Limited (RLL) Entity holding more than 20%

Hemarus Therapeutics Limited (HTHL)

(Formerly known as Credence Clinical Promoter Group companies

Research Private Limited) where common control exists

Rite Diagnostics Private Limited (RDPL) and with which the company

Hemarus Technologies Limited (HTL) had transactions

Credence Power Projects Limited (CPPL)

Credence Infrastructure Limited (CIL)

Hemarus Biologicals Limited (HBL)

Dr. Jayaram Chigurupati, Promoter and Key

Managing Director Management Personnel

8. The Company has investments of Rs. 105.60 lakhs (31.03.2009 - Rs. 105.60 lakhs) in Zenotech Inc., USA (Subsidiary) and has advance (including towards share capital Rs.110.55) aggregating to Rs.366.04 lakhs (31.03.2009 - Rs.398.93 lakhs) to Zenotech Inc., USA. The networth of the subsidiary based on management accounts as at March 31, 2009 has been completely eroded. However having regard to the long term involvement of the Company, management is of the view that no provision is required on this account at this stage.

9. The company has a investment of Rs.0.24 lakhs (31.03.2009 - Rs.0.24 lakhs) in Credence Organics Private Limited (Associate Company) and has given loan of Rs.14.71 lakhs (31.03.2009 - Rs.14.71 lakhs) to the aforesaid entity which is outstanding from earlier years. The networth of the associate based on management accounts as at March 31, 2010 has been completely eroded. However having regard to the long term involvement of the Company, management is of the view that no provision is required on this account at this stage.

10. Capital work in progress shown under fixed assets includes Rs1040.03 lakhs (31.03.2009 - Rs.1041.65 lakhs) in respect of export oriented unit. The said unit has not yet been commissioned.

11. a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year, and is pending allotment. Accordingly Rs. 2.96 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the intrinsic value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share- based Payment issued by the Institute of Chartered Accountants of India.

12. The Company has carried forward as at March 31, 2010 product development expenditure amounting to Rs. 152.32 lakhs to be written off in future years, notwithstanding the insignificant operations during the year and continuing operating losses and low utilization of plant, having regard to the Companys expectation of improving its future level of production and sales.

13. Figures of the previous year have been regrouped / recast wherever necessary to compare with current years classification.

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Mar 31, 2009

1(a) The Company had applied vide its letter dated 4.09.2008 to the Registrar of Companies requested for an extension of time upto 31.12.2008 for the purpose of holding Annual General Meeting (AGM), on the ground that the accounts of one of the subsidiaries could not be completed as there was a major software problem, which was duly granted by Registrar of Companies Andhra Pradesh vide its order dated 9.09.2008. On lapse of the extension, the Company vide its letter dated 26.11.2008 to the Honorable Secretary, The Ministry of Corporate Affairs, New Delhi requested for extension of the financial year 2007-08 up to 31.12.2008, i.e. (for a period of 21 months) and also to pass such consequential orders for postponing the submission of accounts to Annual General Meeting or submission of accounts, annual returns etc,. As on date no approval has been received by the Company. Consequent to the AGM not being held by the Company the accounts for the year ended 31st March, 2008 has not been adopted by the members.

(b) Subsequent to Daiichy Sankyo Company Limited (Daiichi) acquiring 63.92% stake in Ranbaxy Laboratories Limited (Ranbaxy) in October 2008, Daiichi announced an open offer to acquire 20% shares of Zenotech Laboratories Limited (the Company) at Rs. 113.62 per share. Aggrieved by the pricing of the share, one of the shareholders filed a petition in the Honble High Court of Madras. The Company has been named as Respondent in the said case. An interim injuction in connection with the offer was given by the Honble High Court of Madras and subsequently it was quashed by the Honble Supreme Court based on a petiion filed by Daiichi against the said injuction. Meanwhile some the shareholders (excluding Ranbaxy) including Promoter and Managing Director of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company. SAT directed Daiichi to price the open offer at Rs. 160 per share. Daiichi has filed an appeal against the SAT order in the Supreme Court.

2. Contingent liabilities (Amount in Rs. Lakhs)

As at As at March 31, 2009 March 31,2008

Liability in respect of Bank guarantees 116.96 90.63

Liability in respect of Letter of credits 48.33 257.20

3. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for, as at March 31st, 2009 is Rs. 20.56 lakhs (31.03.2008: Rs. 155.23 lakhs).

4. Secured loans:

i. Term loans taken by the Company from Andhra Pradesh State Financial Corporation (APSFC) are secured by way of hypothecation of plant and machinery and mortgage of land related to Biologies facility and R&D facility and personal guarantee of the Director of the Company.

ii. Term loan taken from the Technology Development Board (TDB) is secured by way of paripassu first charge on the whole of movable properties of the company including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future and paripassu first charge on land or other immovable property of the company, present and future, and personal guarantee of the Director of the Company.

iii. Cash Credit/working capital loan from YES Bank is secured by first Pari Passu charge on current assets of the Company.

iv. Vehicle loans taken by the Company from Vijaya Bank and HDFC Bank Limited are secured by way of hypothecation of respective vehicles.

v. In respect of loans repaid to Axis Bank, the Company is in the process of filing satisfaction of charges.

5. Capital work-in-progress includes capital advances of Rs.24.44 lakhs (31.03.2008: Rs.296.88 lakhs)

6. Sundry Creditors:

The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosures, if any, relating to amount unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

7. Segment reporting:

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals in India, which in the context of Accounting Standard (AS) 17 - "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006 is considered the only business segment.

8. Taxation:

Deferred Tax is accounted for by computing the tax effect of timing difference which arises during the year and reverse in subsequent periods. Deferred tax assets are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

9. Related Party Disclosures:

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notified by the Companies (Accounting Standards) Rules, 2006.

(A) Name of the Related Party Relationship

Zenotech Farmaceutica Do Brasil Limiteda, Brazil (ZFDBL) ]

Zenotech Laboratories Nigeria Limited, Nigeria (ZLNL) [ Subsidiary

Zenotech, Inc., USA

Credence Organics Private Limited (COPL) Associate

Ranbaxy Laboratories Limited (RLL) Major Shareholder

Credence Clinical Research Private Limited (CCRPL) Promoter Group companies

Rite Diagnostics Private Limited (RDPL) where common control exists

Hemarus Technologies Limited (HTL) > and with whom the company

Credence Power Projects Limited (CPPL) had transactions

Credence Infrastructure Limited (CIL) J Hemarus Biologicals Limited (HBL)

Dr. Jayaram Chigurupati, Promoter and Key

Managing Director Management Personnel

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Mar 31, 2008

1. Contingent liabilities (Amount in Rs. Lakhs)

As at As at March 31, 2008 March 31,2007

In respect of matters under dispute:

- Customs Duty - 14.99

2. Estimated amount of contracts remaining to be executed on capital account not provided for, as at March 31, 2008 is Rs. 452.11 lakhs (Previous year: Rs. 245.16 lakhs).

3. Secured loans

i. Term loans taken by the Company from Andhra Pradesh State Financial Corporation (APSFC) are secured by way of hypothecation of plant and machinery and mortgage of land related to Biologies facility and R&D facility and personal guarantee of the Director of the Company.

ii. Term loan taken from the Technology Development Board (TDB) is secured by way of paripassu first charge on the whole of movable properties of the company including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future and paripassu first charge on land or other immovable property of the company, present and future, and personal guarantee of the Director of the Company.

iii. Cash Credit/working capital loan from Axis Bank Limited is secured by way of hypothecation on first charge basis of all the current assets of the Company, present and future, and hypothecation on second charge basis of all movable plant and machinery, furniture and fixtures, present and future and personal guarantee of the Director.

iv. Cash Credit/ working capital taken from Andhra Bank are secured by way of first charge on the current assets ranking paripassu with Axis Bank and second charge on the fixed assets, present and future ranking paripassu with APSFC, TDB and Axis Bank Limited and personal guarantee of the Director of the Company.

v. Cash Credit/working capital loan from YES Bank is secured by first Pari Passu charge on current assets of the Company.

vi. Vehicle loans taken by the Company from ICICI Bank Limited and HDFC Bank Limited are secured by way of hypothecation of respective vehicles.

vii. In respect of loans repaid, the Company is in the process of filing satisfaction of charges.

4. Sundry Creditors

Sundry creditors (Schedule 8 - current liabilities) includes Rs. Nil due to Micro enterprises and small enterprises as defined under Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006). The Company has not received any memorandum (as required to be filed by the suppler with the notified authority under the MSMED Act, 2006) claiming their status as Micro or Small or Medium Enterprises.

5. Segment reporting

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals, which in the context of Accounting Standard 17, issued by the Institute of Chartered Accountants of India, is considered the only business segment.

6. Taxation

i) There is no tax liability for the current financial year.

ii) Deferred Tax:

In the previous year the Company, in accordance with Accounting Standard (AS-22) on "Accounting for Taxes on Income", has taken credit of Rs. 290.14 lakhs in the profit and loss account recognising deferred tax asset in respect of carried forward business losses including unabsorbed depreciation after adjusting deferred tax liability on account of timing difference in depreciation.

The Company during the current financial year, has reviewed and reassessed the total deferred tax asset/ liability and in view of substantial brought forwarded unabsorbed depreciation and accumulated losses as on March 31, 2007 and no taxable income for the current year, the net deferred tax asset of Rs. 229.06 lakhs as given below has been reversed:

7. Related Party Disclosures

Information relating to Related Party transactions as per "Accounting Standard 18" issued by the Institute of Chartered Accountants of India

(A) Name of the Related Party Relationship

Zenotech Farmaceutica Do Brasil Limiteda, Brazil (ZFDBL)

Zenotech Laboratories Nigeria Limited, Nigeria (ZLNL) Subsidiary

Zenotech, Inc., USA

Credence Organics Private Limited (COPL) Associate

Ranbaxy Laboratories Limited (RLL) Major Shareholder

Credence Clinical Research Private Limited (CCRPL)

Rite Diagnostics Private Limited (RDPL) Promoter Group companies where

Hemarus Technologies Limited (HTL) > common control exists and with

Credence Power Projects Limited (CPPL) whom the company had transactions

Credence Infrastructure Limited (CIL)

Dr. Jayaram Chigurupati, Managing Director Promoter and Key Management Personnel

Ms. Padmasree Chigurupati Promoter and relative of Key Management Personnel

8. Accounting Standard 15 (Revised) - Employee Benefits (AS-15) has become applicable to the Company form the current year and consequently, it revised the provision for retirement and other benefits as at March 31, 2007. An additional liability of Rs. 4.50 lakhs arising out of such revision has been adjusted to the opening balance in the profit and loss account as at April 1, 2007 in accordance with the transitional provisions of AS-15. The employee benefits are as under:

i. Provident Fund: Eligible employees of the Company receive benefits under the Provident Fund which are defined contribution plans wherein both the employees and the Company make monthly contributions equal to a specified percentage of the covered employee salary. The contributions are made to the Regional Provident Fund Commissioner and are charged to the Profit and Loss Account in the period they are incurred.

ii. Gratuity: In accordance with the Payment of Gratuity Act, 1972 the Company provides for gratuity, a defined benefit plan (the Gratuity Plan) covering eligible employees. Liabilities with regard to such gratuity plan are determined by actuarial valuation and are charged to Profit and Loss Account in the period determined.

iii. Provision for Unutilised Leave: The accrual for unutilized leave is determined for the entire available leave balance standing to the credit of the employees at period end. The value of such leave balance eligible for carry forward is determined by actuarial valuation and is charged to Profit and Loss Account in the period determined.

9. a) There are no outstanding forward exchange contracts as at the year end.

10. During the year the Company entered into an agreement dated March 9, 2007 with Ranbaxy Pharmaceuticals Inc for developing Abbreviated New Drug Application. Income of Rs.687.55 lakhs received in respect of aforesaid activity has been included under sales and other operations.

11. The disclosures in respect of Employees Stock Option Scheme which are outlined in this years Annexure to the Report of the Directors & Management Discussion and Analysis and Report on Corporate Governance are treated as an annexure to these accounts.

12. Figures of the previous year have been regrouped / recast wherever necessary to compare with current years classification.